tmsnrt.rs/3dXKQYM* MSCI World index holds steady; T-Bill yields rise* Gold on track for third week of gains* Reflation trade in doubt as COVID-19 cases rise* Treasury rally stalls: tmsnrt.rs/3dXKQYM Reuters, LONDON/SYDNEY, July 9 – On Friday, markets took a cautious break in the face of new concerns over the pace of the world’s economic recovery following COVID-19. World stocks held steady, Treasury yields bounced, and the dollar held firm. Markets have been roiled this week as an increase in instances of the Delta coronavirus strain around the world stifled risk appetite and prompted a flight to safety as some investors wagered that the post-pandemic reflation trade is gone for the time being. “Many appear to be gradually realising that vaccination programs alone would not be enough to restore economies to pre-Covid normalcy,” said Deutsche Bank analyst Jim Reid. “Cases at the global level are now ticking up again as the more contagious delta strain spreads across the world.” In early European trade, the MSCI World index remained steady, as advances on various regional bourses managed to balance overnight declines in Asia. The STOXX Europe 600 index increased by 0.8%. MSCI’s broadest index of Asia-Pacific shares outside Japan fell to two-month lows overnight in Asia before recovering. Stock futures in the United States pointed to a 0.2 percent increase in the opening bell on Wall Street. Analysts believe that a series of events, rather than a single cause, triggered the shift in sentiment. Fears that central banks will stifle economic recovery by tightening policy to combat inflation, as well as the rapid spread of the Delta strain and poor vaccination rates, have dimmed the outlook. Stay-at-home orders were implemented in Sydney, Australia, to help stop the spread of the illness. Vietnam also imposed new restrictions, resulting in a record number of deaths across South Asia. After a dramatic drop earlier in the week, 10-year Treasury rates rallied back on Friday, rising approximately 4 basis points to 1.334 percent, though still much below the March 2021 highs of 1.776 percent. The number of Americans submitting new jobless claims increased on Thursday, adding to concerns that the job market’s recovery from the COVID-19 outbreak is still turbulent. The safe-haven yen held near a one-month high of 110.01 per dollar in currency terms. The euro fell to $1.1834, a new low. The dollar index, which measures the greenback against a basket of six currencies, was unchanged at 92.443. Gold, another safe-haven asset, was projected to increase for the third week in a row. It was recently trading at $1,803 an ounce, up 0.1 percent. Oil prices continued their upward trend from the previous day. Brent crude was trading at $74.41 a barrel, up 29 cents. Crude oil in the United States rose 41 cents to $73.35 per barrel. Sujata Rao contributed additional reporting, while Shri Navaratnam and Timothy Heritage edited the piece./n
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